Service providers will battle for limited but lucrative contracts

Despite the almost daily announcements from all over the world about the creation of emarketplaces, IDC believes projections calling for thousands of emarketplaces by 2004 are overzealous. IDC is much more conservative, forecasting only several hundred emarketplaces in 2004.

"eMarketplaces are just one segment of the business-to-business ecommerce landscape," said Dr. Leo Lipis, senior analyst for IDC`s eMarketplace Services research program. "Among genuine emarketplaces, many of those announced will not be built, many of those built will not survive, and many of those that survive will consolidate into super-emarketplaces."

According to IDC, an emarketplace is an Internet-based broker of goods or services within a community of sellers and buyers. It must have an open structure and a level playing field for all participants.

Although IDC believes the number of actual emarketplaces will be finite, the market research firm is confident plenty of opportunity will still exist for service providers.

"A limited number of emarketplaces translates into a limited number of contracts on which to bid, but this does not mean the opportunity around these contracts is small," Lipis said. In fact, IDC expects service contracts for emarketplaces to be quite lucrative the largest will top tens of millions of dollars, and the total market will exceed $10 billion in 2004. "The key to cashing in on the emarketplace service opportunity is acting quickly because there will be only a limited number of contracts with emarketplaces."

Additionally, IDC reminds service providers that emarketplaces are just one of several opportunities triggered by the Internet. The integration of buyers and sellers into emarketplaces, eprocurement, edistribution, intranets, and wireless integration with Web sites are a few examples of others.